Sunday 22 April 2018

Egypt raises cooking gas price ahead of IMF

Cairo, April 1, 2013

Egypt sharply raised the price of cooking gas on Monday, trimming the energy subsidies that are crippling its budget but risking further unrest among a population impoverished by economic crisis.

The supply ministry said cooking gas cylinders for residential use will cost 60 percent more, and they will double in price for businesses.

The government is under pressure to cut subsidies to secure a $4.8 billion International Monetary Fund loan and contain a budget deficit that has soared during two years of political upheaval since President Hosni Mubarak was overthrown.

Egypt's foreign currency reserves have fallen to critically low levels, threatening its ability to buy in supplies of fuel as well as wheat, of which it is the world's biggest importer.

The price for butane gas cylinders will rise to 8 Egyptian pounds ($1.18) for home and 16 for commercial use, a supply ministry official said.

The increase, the first in two decades, is part of a government reform program to bring down the cost of subsidized energy, the official said.

It reflects higher costs for transport, maintenance and salaries for service staff at gas cylinder stations, state news agency MENA said, citing the ministry.

An IMF delegation is due to arrive in Cairo on Wednesday for a new round of loan talks, a government spokesman said on Sunday.

President Mohamed Mursi initialled a deal with the IMF last November but postponed ratification in December in the face of unrest triggered by a political row over the extent of his powers.

The government is considering three scenarios for a fuel subsidy plan for the 2013/2014 financial year, Oil Minister Osama Kamal said, the business daily al-Alam al-Youm reported.

Subsidy costs would range between 99 billion pounds and 140 billion pounds, depending on the timing and whether the government would start a smart card system to regulate gas and petrol consumption, the paper said.

Shortages of state-subsidized diesel have paralyzed transportation in part of the country. – Reuters

Tags: Egypt | Cairo | loan | IMF | subsidy | cooking gas |

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